Gujarat High Court
K Z Leasing And Finance Ltd Through ... vs Union Of India Through The Secretary & 4 on 1 September, 2017
Author: N.V.Anjaria
Bench: N.V.Anjaria
C/SCA/10231/2008 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 10231 of 2008
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE N.V.ANJARIA
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1 Whether Reporters of Local Papers may be allowed
to see the judgment ? No
2 To be referred to the Reporter or not ? No
3 Whether their Lordships wish to see the fair copy of
the judgment ? No
4 Whether this case involves a substantial question of
law as to the interpretation of the Constitution of No
India or any order made thereunder ?
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K Z LEASING AND FINANCE LTD THROUGH CHAIRMAN AND....Petitioner(s)
Versus
UNION OF INDIA THROUGH THE SECRETARY & 4....Respondent(s)
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Appearance:
MR HEMANG M SHAH, ADVOCATE for the Petitioner(s) No. 1
ADVOCATE NOTICE SERVED for the Respondent(s) No. 2 - 5
MR SIDDHARTH DAVE FOR MR DEVANG VYAS, ADVOCATE for the
Respondent(s) No. 1
MS NAYNABEN K GADHVI, ADVOCATE for the Respondent(s) No. 2 - 5
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CORAM: HONOURABLE MR.JUSTICE N.V.ANJARIA
Date : 01/09/2017
ORAL JUDGMENT
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HC-NIC Page 1 of 8 Created On Sun Oct 01 11:43:17 IST 2017 C/SCA/10231/2008 JUDGMENT Heard learned advocate Mr.Hemang Shah for the petitioner and learned advocate Mr.Siddharth Dave for respondent No.1.
2. By way of this petition under Article 226 of the Constitution, the petitioner challenges the decision of the Ministry of Finance, Government of India, dated 08th December, 2006 as communicated to the petitioner by letters dated 04th January, 2007 and 28th March, 2008 from the Senior Superintendent of Post Offices, Ahmedabad City Division, to allow the petitioner to refund of only Rs.05,00,000/- being the invested value of Kisan Vikas Patras without interest of Rs.05,00,000/- payable on the maturity of the said certificates, on the plea that the Kisan Vikas Patras (KVP) cannot be issued in the name of the firm/ institution and KVP certificates were irregularly issued in the name of the petitioner company.
3. The Reserve Bank of India by Notification dated 30th April, 1997 required Non-Banking Financial Companies, Equipment Leasing Companies, Loan and Investment Companies to maintain liquid assets of not less than 10 per cent/5 per cent depending of their regulatory status. As per the above directives of the Reserve Bank of India, the petitioner purchased 50 Kisan Vikas Patras of the denomination of Rs.50,000/- each on 23rd July, 1998 of the total value of Rs.05,00,000/- from the Naranpura Area post office bearing distinctive serial numbers. The petitioner purchased another set of 50 Kisan Vikas Patras for the further value of Rs.05,00,000/- on 06th October, 1999 which was issued by the post office concerned with Page 2 of 8 HC-NIC Page 2 of 8 Created On Sun Oct 01 11:43:17 IST 2017 C/SCA/10231/2008 JUDGMENT distinctive serial numbers.
3.1 The first set of 50 certificates purchased as above was presented on maturity on 04th February, 2004 and the post office concerned paid the maturity value of Rs.10,00,000/-. The second set of the KVP certificates were getting matured on 06th October, 2005, on which date they were presented by the petitioner before the post office as duly discharged, seeking the payment, however no payment was made. The petitioner sent reminders dated 30th November, 2005 and others requesting for expeditious encashment of the certificates.
3.2 Finally on 07th August, 2006, Senior Superintendent of Post Offices, Ahmedabad City Division - respondent No.4 herein, wrote to the respondent No.3 - Chief Post Master General that with effect from 01st April, 1995, KVP certificates could be issued in the name of firm or institution and the petitioner being company, KVP certificates were issued irregularly. The petitioner sent legal notice reiterating its claim for interest and payment of maturity value. On 04th January, 2007 the petitioner was intimated that it would be refunded only the invested value of the certificates, that is Rs.05,00,000/-, and no interest would be paid. The respondent No.4 sent copy of letter dated 08th December, 2006 of the Ministry of Finance, Government of India, containing decision that only invested value could be refunded. Rs.05,00,000/- being the invested value of 50 KVP certificates came to be paid to the Page 3 of 8 HC-NIC Page 3 of 8 Created On Sun Oct 01 11:43:17 IST 2017 C/SCA/10231/2008 JUDGMENT petitioner on 16th May, 2008. As the respondent authorities refunded only invested value of Rs.05,00,000/- without any interest on payability, petitioner approached this Court.
3.3 On 11th August, 2008 while issuing Rule in the petition, this Court passed interim order directing respondent Nos.1 and 3 to 5 to deposit amount of Rs.05,00,000/- with the Court. It was stated that the amount as directed by the Court is deposited and has been invested by the Registry.
4. Though the petition was contested by filing affidavit-in-reply, at the time of hearing, position of law could not be disputed that the issue is covered by decision of Division Bench of this Court in Devang Co-operative Housing Society Limited v. Sub Post Master being Letters Patent Appeal No.1509 of 2004 decided as per the judgment dated 17th August, 2004. When learned advocate for the petitioner pressed into service the aforesaid decision, learned advocate for the respondent was not in a position to dispute the law laid down therein.
5. In Devang Co-operative Housing Society Limited (supra), the facts were that the said co- operative society has purchased KVPs. As the postal authority refused to pay the interest and the maturity value, petition was filed by the society before this Court. Learned Single Judge of this Court dismissed the petition and did not grant the prayer. The Division Bench, however, while allowing the Appeal, Page 4 of 8 HC-NIC Page 4 of 8 Created On Sun Oct 01 11:43:17 IST 2017 C/SCA/10231/2008 JUDGMENT observed and held as under.
"It is no doubt true that there are specific Rules framed for purchasing Kisan Vikas Patra under which the appellant society as such would not be entitled to purchase Kisan Vikas Patra. In spite of this, the fact is that the respondent authority without informing or bringing it to the notice of the appellant society accepted the said amount way back in 1997 and it is only when in 2002 after a lapse of period of more than 5 and 1/2 years when the appellant society had applied for renewal of it, then only the appellant society was told that neither the said amount can be renewed nor it can get the amount with interest on it on its maturity date. If the appellant petitioner was told in 1997, then it being a society, it would have definitely invested the said amount in any other nationalised saving scheme. Having accepted the said amount from the appellant petitioner without bringing it to its notice that it was not entitled to purchase Kisan Vikas Patra, then in our considered opinion, it would not like good in the mouth of the respondent authority to say that the appellant society was not entitled for interest on Kisan Vikas Patra. The principle of unjust enrichment would also apply to the Government and its agencies. Having retained the amount of Rs.30,000/- for a period of more than 5 years, the respondent authority cannot take the stand that it would not pay the amount of interest. #. In our considered opinion, the judgment of the Honourable Supreme Court in the case of Union of India Vs. Deoki Nandan, reported in AIR 1992 SC 96 relied upon by the learned Single Judge in his judgment has no application to the facts of this case. When the judgment of another learned Single Judge of this Court in PPF matter is confirmed by the Division Bench, then in our considered opinion, the same was binding to the learned Single Judge. Merely because the Rules are different, that would not be a ground for discarding the said judgment. The principle remains the same. In the matter of Special Civil Application No.12508 of 2000 almost the same question was there regarding irregularity committed while opening PPF Account. Here, in the instant case, there was irregularity committed by the appellant petitioner society in purchasing Kisan Vikas Patra. If the interest was allowed by the learned Single Judge of this Court in PPF matter, then we are of the considered opinion that on the same line, the appellant petitioner society was entitled to have interest on Kisan Vikas Patra purchased by it from the respondent authority because the appellant petitioner society was bonafide purchaser of Kisan Vikas Patra and for no fault of it, it cannot be penalised by withholding interest for a period of 5 and 1/2 years of Kisan Vikas Patra purchased by it way back in March 1997.
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In view of the above discussion, this appeal is allowed. The judgment and order dated 14.7.2004 passed by the learned Single Judge dismissing Special Civil Application No.2877 of 2003 is hereby quashed and set aside and the main Special Civil Application No.2877 of 2003 is accepted. It is held that the appellant petitioner society was entitled to have interest of Rs.30,000/- on the principal amount of Rs.30,000/- which it had invested by way of Kisan Vikas Patra with the respondent authority."
5.1 The attention of the Court was also invited to another decision of the Division Bench of this Court in Chiloda Seva Sahakari Mandli Limited v. Sub Post Master being Letters Patent Appeal No.3249 of 2007 decided on 05th December, 2008 which was a petition preferred seeking to quash decision dated 23rd March, 2006 by which the request of the said petitioner to pay the maturity amount of KVPs was rejected. In that case, decision of Devang Co- operative Housing Society Limited (supra) was considered vis-a-vis other decisions of the Apex Court and it was held that the judgment rendered by the Division Bench of this Court in Devang Co-operative Housing Society Limited (supra) had become final. The relevant portion from the said decision in Chiloda Seva Sahakari Mandli Limited (supra) may be usefully extracted.
"2. When matter came up before learned single Judge, learned counsel for the petitioner placing reliance on a Division Bench decision of this Court in Devang Coooperative Housing Society Limited v. Sub Post Master, 2006(1) GLH (U.J.) 1, submitted that the ratio laid down therein is squarely applicable to the facts of the present case and therefore, the petitioner is entitled to get the maturity amount of Kisan Vikas Patras. Counsel appearing for the Department submitted that the principle laid down by the Apex Court in Post- Master, Dargamitta HPO, Nellor, vs. Raja Prameelamma, (1998) 9 SCC 706 was not considered by the Division Page 6 of 8 HC-NIC Page 6 of 8 Created On Sun Oct 01 11:43:17 IST 2017 C/SCA/10231/2008 JUDGMENT Bench and therefore, the matter requires reconsideration. Reference was also made to another decision of the Apex Court in the case of Union of India and another v. Manik Lal Banerjee, (2006) 9 SCC
643."
"4. We have perused the judgment of the Apex Court in the case of Post-Master, Dargamitta HOP, v. Raja Prameelamma. In that case, the Apex Court was examining the correctness of the orders passed by the District Forum and the State Commission functioning under the Consumer Protection Act 1986. The Apex Court was dealing with the issue of issuance of National Saving Certificate and the Court noticed that the certificate was issued contrary to the terms and conditions embodied in the contract. Primarily, the Apex Court was examining as to whether there was any deficiency in service in terms of section 21(1)(g) of the Consumer Protection Act, 1986. In the circumstances, the principle laid down by the Apex Court in the above- mentioned decision would not apply in the present case."
5.2 It is clinching that the decision of the Division Bench in Devang Co-operative Housing Society Limited (supra) was carried before the Apex Court by the Department by filing Special Leave to Appeal (Civil) CC No.6662 of 2005 and the Apex Court dismissed the said special leave petition. Therefore, the said decision has become final.
6. As a result of above, present petition deserves to be allowed. The petition stands allowed. The decision of the Ministry of Finance, Government of India, dated 08th February, 2012 communicated to the petitioner by letter dated 04th January, 2007 and 23rd January, 2008 by respondent No.4 - Senior Superintendent of Post Offices, Ahmedabad City Division, Ahmedabad, is hereby quashed. The petitioner is entitled to the total amount of KVPs as may be payable on the maturity.
6.1 This Court had directed the respondents to
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deposit Rs.05,00,000/- with this Court as per the
interim order noted above. Original investment value of Rs.05,00,000/- was already paid back to the petitioner. Therefore by allowing the present petition, Registry is directed to pay the said amount of Rs.05,00,000/- to the petitioner together with interest which may have accrued upon investment of the said amount, after following necessary procedure and completing the formalities, on or before 30th September, 2017.
7. Rule is made absolute accordingly.
(N.V.ANJARIA, J.) Anup Page 8 of 8 HC-NIC Page 8 of 8 Created On Sun Oct 01 11:43:17 IST 2017